Jan 16

30

Adjudication was one of the ambitious propositions of Information Technology Act 2000 (ITA 2000) to promote quick and fair justice to Cyber Crime victims. It envisaged easy procedures free from Civil Procedure Code restraints, justice within 4 months from an authority which should have a good understanding of technology.

However since 2003 when the IT Secretaries of State were designated as Adjudicators for their respective states, few have shown the inclination to assume responsibility.

First person to act and deliver awards as an Adjudicator was Mr P W C Dawidar of Tamil Nadu. He had the distinction of giving out one of the first awards against Banks in the S Umashankar Vs ICICI Bank case and followed it up with other similar judgements in other cases. But he was silenced by being transferred out of the department after J Jayalalitha took over as the CM. Perhaps it was a routine transfer of the new Government but was a move which killed the Adjudication system in Tamil Nadu.

The next to emerge was Rajesh Aggarwal of Mumbai who took scores of decisions, created history by conducting an online arbitration and gave a huge fillip to the system.

Now a third Adjudicator has emerged Gujarat in the form of Mr Dhananjay Dwivedi who recently heard a Phishing complaint against Dena Bank and Idea and gave a judgement in favour of the customer who was the victim of Phishing.

While delivering the judgement, Mr Dwiwedi has made the following comment which is noteworthy.

“Of late, the society is seeing rise in the number of fraudulent transactions over on-line platform. The criminal intent and crime against property etc. is being taken through the criminal justice system. In all such cases, State being the prosecutor, the cases are taken through the criminal jurisprudence with police helping the criminal justice system.

However, there seems to be a lack of awareness for the civil remedy available to the citizens in terms of penalty as well as compensation under provisions of the , Information Technology Act.

To ensure that citizens become aware of the provisions of the law and also become more vigilant in guarding personal information that is sensitive in nature and become aware about security practices to safeguard one’s on-line space, there is a general need to increase awareness about the new legal framework introduced through the mechanism of Information Technology Act and Rules thereunder.

Accordingly, it is ordered that decision in this case be put in public domain and be widely publicized. “

I hope that he would keep the system alive in the coming days by accepting such complaints so that the spirit of ITA 2000 in ensuring speedy justice remains.

“Virtual ODR” is the ODR system that is adopted by Arbitration.in. It is an ODR system in the sense that it is an “Online” system for conducting Dispute Resolutions such as Arbitration or Mediation. But it is different from the so called ODR systems which are being presently used worldwide and let’s try to understand the differences.

In the ODR system that is generally used, the Website that offers the services functions like a “Arbitral Center”. The person who invokes the system (claimant) sends a request by e-mail to the center with necessary information about the respondent. The Center appoints an Arbitrator and forwards the claimant’s request to him. There after, the Arbitrator takes over and sends an e-mail notice to the respondent. When the response is received, it is communicated to the claimant and his response to the respondent’s reply is sought. Arbitrator will decide when the chain of correspondence has to be closed and declare that he has all the necessary information to take a decision and proceeds to convey his award.

In this entire process, lot of time is wasted in waiting for the response from the other party and even when received, it may be incomplete and need clarification. Hence the process may have to go through several cycles of exchanges unless the Arbitrator puts his foot down and rules that the exchange of responses will be allowed only once or twice. This may leave the disputing parties dissatisfied. Additionally, if the process is challenged in a Court, there will be needless discussions on what the Arbitrator did or did not do.

On the other hand the Virtual ODR system of Arbitration.in functions principally as a service provider to the Arbitrator. Where required, it
may provide back office services but all proceedings will be done in the name of the Arbitrator only and the website only acts as an intermediary service provider.

The actual process of arbitration is conducted in a virtual meeting room. While e-mails are exchanged initially, it is for issue of access credentials to the people who have to be present and not on the proceedings.

If the parties need to introduce evidence in the form of lengthy documents which need to be studied by the other party, it may be sent by e-mail as advance information but are confirmed during the virtual session. However the face to face (virtual) meeting in which the parties, their counsels and the Arbitrator meet together enables all discussions to take place in a virtual replication of a physical meeting. Even witnesses can be examined in the same room. In view of the meeting of all parties in one place, small differences of opinion can be settled quickly and to the satisfaction of all parties. There is therefore better clarity on the views of either parties and saving of repeated exchanges of e-mail just to present points and respond to the points raised by the other.

Additionally, the Registrar of the Arbitration.in will be present during the session and take complete notes of all the proceedings by simply making a video recording of the entire process. This results in complete transparency when the proceedings are to be discussed later when challenged in a Court. Since the recording is certified by the Registrar under Section 65B of Indian Evidence Act, it is admissible as evidence in any Indian Court under law.

Hence the Virtual ODR process is distinctly superior in terms of not only operating efficiency but also in terms of judicial acceptance.

This type of Virtual ODR with certification of proceedings is considered unique and innovative.

I hope the Arbitration community appreciates the benefits and start using the system.

Jan 16

29

Naavi has recently launched the New and Improved service for online Arbitration at www.arbitration.inThe service is presently available for any commercial arbitration though lot more work is being done in the background to scale up the services as a new StartUp.

While introducing the service to some of the professionals in the Arbitration industry, it was observed that there was some difficulty in understanding the nature of the service and whether it is a “Legal Service or a Technology Service”.

The fact is that Arbitration.in is a Technology Service to be used by the legal professionals and can be rightly called a “Techno Legal Service”. or an IT Enabled Legal/Judicial Service

It’s Different

Arbitration is already an established ADR (Alternate Dispute Resolution) process and its benefits are easily appreciated. Mediation is another similar form of ADR which also has been used extensively. Worldwide, there has been a talk of ODR (Online Dispute Resolution) and when Arbitration.in is introduced as an ODR, many are unable to immediately recognize that this is not the ODR they have otherwise heard. It is different.

In order to provide more clarity to why the system proposed by arbitration.in is globally unique, innovative and judicially robust, I discuss some of the USPs of the project.

It is wise to be ODR Ready rather than be sorry later

First of All, I would like to clarify that the target audience for the Arbitration.in service are the “Arbitrators” and the “Arbitration Councils”. (Or the Mediators and Mediation Councils).

When an existing Arbitrator is called upon to conduct an Arbitration, it is open to him to set the rules of conduct. Since most of the Arbitrators are familiar with the Court procedures under Civil Procedure Code (CPC), though the Arbitration Act provides them to be flexible, they tend to err towards the safer side of doing things just as in the CPC.

But with the need to speed up the proceedings and particularly when pursuing a “Fast Track” arbitration under the amended Arbitration Act, there is need for Arbitrators to innovate without losing the “Principle of Natural Justice”.

It is therefore open to the Arbitrator to suggest that the Claimant of an Arbitral proceeding (originator) and the Respondent to adopt the ODR process under Arbitration.in.

Inevitability of Transformation

Permanent Arbitral Institutions may in their rules include the ODR process of Arbitration.in as part of their approved process so that any member of the institution can use it if he so desires.

Obviously, ODR of Arbitration.in would not be used if all the parties are comfortable of the use of the system and agree to use it. If they donot agree, the Arbitrator may fall back upon the clause in the Agreement which may define the Seat of Arbitration. In the case of Arbitral Institutions, the institution itself may provide the physical and secretarial infrastructure which will be used by default.

If the disputing parties recognize the advantages of the Arbitration.in facilities, they can either incorporate the use of Arbitration.in in their contract itself or agree to use it in a supplementary agreement. The arbitrator may then have to be chosen on the basis of whether he would be able and willing to use the ODR of Arbitration.in.

It may not be too far for E Commerce companies such as the Snapdeal or 99 acres.com or the online Banks, to insist that they would resolve their consumer disputes only through ODR, since otherwise, the time and effort required for grievance redressal (mandatory requirement under Section 79 of ITA 2000/8) would be unproductive for their business.

Arbitral Houses should therefore try to be “ODR-Ready” before their members start losing out business in the emerging Digital India. At the same time, the young and tech savvy new generation of Arbitration professionals may opt to be individually “ODR Ready” and start using ODR to an extent that public may start preferring them instead of those who stick to the legacy systems.

ODR particularly of the variety proposed by Arbitration.in has the potential to be a disruptive technology that will shake up the ADR industry. Initially there may be an attempt at protecting the legacy system by those who are already established, but sooner or later the young brigade and the USPs offered by the new technology would break any attempt to delay the onset of ODRs as the most preferred option for ADR.

Just as Sunil Manohar Gavaskar had to give up his opposition for limited over cricket the Gavaskar’s of the ADR industry will have to transform themselves to the ODR world.

It would therefore be inevitable that all Arbitrators as well as the Permanent Arbitral Institutions take steps to upgrade themselves to the use of ODR.

Arbitration.in has therefore placed a high emphasis for providing training to the members of the ADR community on how to use the ODR facilities of Arbitration.in. It is expected that the community will use these training services to familiarize themselves with the ODR process.

I have already claimed that the ODR process of Arbitration.in is “Different”. First of all I refer to this as “Virtual ODR” instead of calling it only as ODR so that we can distinguish it from the current forms of ODR which are in vogue mostly outside India.

Transformation from ADR 2 Virtual ODR is

-A Transformation from

–Confusion to Clarity

–Delays to Expediency

–Inefficiency to Efficiency

–Opaqueness to Transparency

I will explain the difference in the follow up article how these USPs add up to make Arbitration.in a globally unique service.

Jan 16

26

When we receive spam mails we often wonder what we do with them. Many of these mails are “Phishing” Mails trying to drop a trojan into your computer for committing a more damaging fraud. If you donot notice, you may have to regret your ignorance later. But even when you identify the fraudulent mail, you get irritated because you feel helpless that you can do nothing other than deleting them.

An “Attempt to drop a trojan” is a cognizable offence under ITA 2000/8 and all of us as citizens of India who observe a “Cognizable offence” have a duty to report it to the law enforcement authorities.

In some of these cases, Phishing mails emanate from an ISP who can take steps to block such mails at least prospectively.

Hence there is a public service value in reporting such incidents. Naavi has created a facility/service for this purpose through www.cyber-notice.in where such public notices in cyber space can be published.

I give here an example of how such a service can be used.

I received today an e-mail which was apparently from the VSNL team of TATA DOCOMO threatening shutting down of my account unless I do an Account validation for which an in-mail link was provided.

The header information contained an IP address indicating that the e-mail had originated from Nigeria. However the e-mail ID was autoflex@vsnl.com and hence the sender was a customer of VSNL.

I have therefore placed a Cyber Notice addressed to VSNL that one of their customers is indulging in such a criminal activity and demanding that the account autoflex@vsnl.com be blocked. At this point of time, I am not confident that VSNL will respond.

However, as a citizen of India I have done my duty to keep them informed and triggering the requirement of “Due Diligence” under ITA 2008. Legally, if no action is taken, some victim can hold VSNL and its executives responsible under Section 79 of ITA 2008.

Being a public notice this also keeps the police at various places informed so that they can take their action as they find it necessary.

At present, such public interest notices will be published by Cyber Notice.in as a free public service.

The service Cyber-Notice.com has been started as a support to the legal requirements where by “Notices” often are released under Court proceedings in prominent print media. In the currrent generation, the purpose of such services would be served only if they are published in Cyber Space and are available for search engines to pick up. Just as many ideas of Naavi, this may also take time to get accepted by the community. But it is expected that in due course, Cyber-Notice.in will be an essential tool of every advocate who has to publish notices in support of any litigation.

I suppose it will be extensively used to defend against phishing and to give notices to ISPs who fail to take action against spammers and contribute to the proliferation of phishing frauds.

Jan 16

23

It is heartening to note that the World Bank has recently praised the Modi Government that the “Ease of Doing Business” in India has become better in the current year. (See report from Hindu)

Yesterday, a meeting of the CFO forum in CII, Bangalore discussed the developments relevant to the Ease of Doing Business.

One of the aspects that came up for discussion was the “Mechanism for ADR” which was also a factor that affects the global ranking of India for the “Ease of Doing Business index.”

While the Modi Government tries to take further steps to improve the country’s rankings for the Ease of Doing Business, I would like to draw the attention of the powers be that development of a good ODR system as would be enabled by Arbitration.in would help in India improving its rank significantly.

I suppose that the time for Arbitration.in has arrived.

According to the ranking report, India improved its ranking from 134 to 130 with a DTF score of 54.68.

One of the key aspects of this scoring is “Enforcement of Contracts”. India ranked 178 in this parameter which was the same ranking last year. This and “Dealing with Construction Permits” at 184 dragged down the India ranking significantly. Considering that this year’s movement of ranking from 134 to 130 was aided by a movement of 29 ranks in Getting Electricity (99 to 70) and 9 ranks in Starting a Business (164 to 155), movement of a single parameter such as “Enforcing Contracts” from the low 178 to say around 150 could make a significant contribution to the improvement of the ranking.

One of the aspects that helps in Enforcement of Contracts is the efficiency of the Judicial Systems which is difficult. But it is possible that development of ADRs could help in improving the ranking in Enforcement of Contracts.

Hence just as special efforts are being made to improve the efficiency in “Starting Business” where the number of days required is presently 29 days and is expected to be brought down to less than 20 days, special efforts must be made to improve the ADR mechanism in India.

ODR can significantly help in achieving this fast track objective when used alone or in combination with the existing ADR system.

If Government wants, it can add a “Double Fast Track” process with ODR and fix 3 months limit for arbitration. This will be such a unique step that, if brought in, the ranking in “Contract Enforcement” may take a quantum upward jump pulling along the ranking for “Ease of Doing Business” also up by several notches.

While it may take some time for the existing Arbitration s to completely switch over to Full service ODR as suggested under Arbitration.in, a combination of Physical and ODR may also be used with some of the initial hearings held online and argument related hearing held offline. This will also reduce the cost and time of the process.

I invite views on these suggestions.

Naavi

Jan 16

18

Disputes are an inevitable reality in business. There is no business without disputes and hence one of the major business Governance issue is how to effectively manage a dispute resolution mechanism in a corporate environment.

Major disputes in a corporate environment are between the management and the employees and between the Company and the Consumers.

With growing E Business concepts, consumers buy and sell online and hence when disputes arise, the first option for them is to seek the dispute resolution also online. Normally the dispute resolutions extend to a chain of e-mails extending over a period. Often the call centers which are better equipped to handle service issues are clogged with the complaints from irate customers.

Even in the employer-employee scenario, often employees who have left the organization and have a dispute to settle with their previous employers find it difficult to resolve differences over e-mails when they have moved out to a different location on a new assignment.

When disputes go out of hand they land up in Courts and everyone including the Courts themselves know that the legal process is very painful and better avoided. Hence ADR (Alternate Dispute Resolution Concepts) are gaining ground . Mediation and Arbitration are therefore becoming the preferred methods of dispute resolution which even the Civil Procedure Code is recommending in every civil dispute.

Having accepted the concept of ADR, there is still a need for ensuring that the cost of dispute resolution in terms of the time, effort and money spent by the disputing parties to be brought down.

Travelling from place to place to attend an arbitration meeting in a hotel, cost of hosting the meeting in a hotel, cost of stay of the participants and the arbitrators in comfortable accommodation are all issues that add cost to the ADR process beyond the professional fees payable to the Arbitrators and the advocates who represent the disputing parties.

To ease the pain of this physical ADR process, there is an urgent need for development of the ODR process namely the Online Dispute Resolution Process.

Now there is a solution on hand for the ODR process in the form of the Arbitration.in re-launched by Naavi with some modifications from the earlier model.

The website www.arbitration.in provides the details of the service. In its simple explanation, Arbitration.in provides an online meeting place to conduct online Arbitration or Mediation, for a fee which is cheaper than renting a hotel conference room. Participants need not travel but connect through internet and conduct the transactions.

Additionally, Arbitration.in is supported by ceac.in which provides a soft copy of the proceedings recorded as a video under the presence of an observer who is the Registrar of the session and duly certified as required under Section 65B of Indian Evidence Act .

Thus the ODR sessions of Arbitration.in are not only convenient and cost effective but also legally sound.

Kindly note that Arbitration.in is not intended to a competing Arbitration Council to the existing systems. It is only a platform for individual Arbitrations and Mediations and can be used by the Arbitration Councils for the benefit of its members.

I invite Arbitration Councils to make use of this service for the general good of the community.

I request visitors to check out www.arbitration.in and give their feedback as to how it can be made more useful.

The service is just now launched in its new form and yet to be marketed. Any suggestions for marketing the service in India and outside are welcome.